SingTel

SingTel: Nomura cites a 1-4% downside risk potential due to the declining AUD. Average depreciation for the quarter is 4% (vs Mar quarter). If AUD remains at current levels of 1.17 against SGD, the downside to its SingTel earnings is 3% pa. Optus represents 25% of SingTel value and ~29% of current earnings. Overall for SingTel consolidated earnings, if Nomura use the average FX rates for the June quarter and apply it to FY14 and beyond, the earnings cut will be 1% pa. On the rest of the year, the earnings cut would be 4% pa. Separately, SingTel missed out on the Myanmar license where QTel and Telenor were announced as successful applicants. The licenses will likely be issued in September this year and services be rolled out in 2014. The high expected capex on the greenfield operation would not have materially impacted SingTel strong financial capacity, but now there is potential for sustained increase in dividends or specials without it. Nomura has a BUY rating with TP of $4.50.